Posted by After losing large value deals of $1.5M to one of most well-funded startups, my lesson & deep analysis with first-order principles is this.
Be among top 4800, if at all – If Startup or, career or investment path doesn’t lead you among that club, it doesn’t justify the risk of startup
These are Alphas who bend the world & have the power to bend the world with their capital, influence, charisma, & vision. Any trend is downstream of what those 4800 care about. Further they are supported by 25000 odd folks.
In US, the equivalent number is around 7500.
All trends, capital in the market flows towards what’s on radar of those top folks. Rest is all downstream. You may have a fabulous product & tech – but if you aren’t part of executive decisions or at least aware of them – then market isn’t in support of you.
Methodology: – How I came up with the number: This is based on Hurun, Credit Suisse, UBS, income-tax data, Forbes and Times lists, along with tracking who actually influences capital, business and institutions. The numbers are estimates – not an official census – but they are my best educated estimate.
Bad week – Lost deals worth $4M, but straight from how the capital & power centre works
It was a bad week. My co-founder called, “Our colleague has met with an accident. Can you go to see him? He’s new to city”. It seemed the last 10 days were among the heaviest. I went to his PG, took him in my car to a doctor, fearing he might have had a fracture.
Lesson 1: 4800 Power & capital center care deeply about Alpha & Differentiation, Capital, Deep technology more than anything:
Just a few days earlier, we had 2 heavy blows. A lost deal at large bank worth $1-$2.5M.
But good part is – to be part of those 4800 – we need to be utterly distinguished.
Our email directly to CEO’s office got their office & strategy team working. Reaching back to us.
Find what’s keeping those 4800 awake at nights & how they get it done through systems. Rest evertyhing & millions of people are just downstream of what 4800 want. Trends starts form them.
Our proposal stood out alongside OpenAI, Google & one of the largest & well funded startups in India with $300M-400M free cash.
Despite we being small, building differentiation & unique value is the key. If there’s no alpha, forget ever being part of that club of 4800. As I said, not worth.
But still,- we got this, a lost deal. It hurts. I was literally stalking their team for 1.5years, scanning all their documents, podcasts & thinking beyond what’s not said.
“We regret to inform, we will not be proceeding further” – an email from CEO’s office of a large bank. The email tries to put balm, of course the team is courteous in offline & online communication.
It reads “This is in no way a reflection of your capabilities”. Despite this, it delivers deep pain.
We had lost a deal somewhere in the $1M-$2.5M range, depending on how the final scope was decided.
Lesson 2: One right win can put you on the global charts. Or go for Service led commoditized models
We chose the former.
If it worked, it could open up a path to further LTV north of $4M-$5M.
It was a chase of practically 1.5yrs, stalking their teams, scanning, reading, and studying deeply about the bank.
A few days later – I heard the announcement: the deal was awarded to a company which has raised north of $300-400M.
Lesson 3: At the highest level of 4800 people, CEO & decision making will finally go with $300-$400M kind of balance sheet, but you can break this.
This is different than engaging with the procurement department, where there are 20 other vendors. Competition is on brand & price.
If you are different & aligned to the CEO’s goal, the price point is driven by you & the value you bring. The market doesn’t set it. CEO & you decide the price.
The power center respects you as a person. I met CEOs, they were gracious, polite, open to listen. But finally as humans – our actions may not always be as our wish or intend.
These are bound by institutions.
Lesson 4: Since, we don’t have balance sheet of $300-$400M – Our Alpha & a collective trust is the way out
We are now focusing on first go via Innovation Sandbox through national agencies, with industry participation. We now are pitching to chairmen/MDs/CEOs of banks & other firms.
Back to race again. Also, we are making it low entry first. R&D-as-a-Service to get foot in the door.
Lesson 5: We had a bad week. It can spiral you down. Work double hard, more work. It helps
If that wasn’t enough – A VC that we had engaged over months, whom we thought was a good match on both sides, nice person & overlapping thesis – declined.
“Apologies for the delayed reply. But we could not build enough conviction”.
All this, when my family insisted to have Ganpati at home. I reluctantly acceeded to thier true love & devotion. I am sort of reluctant to take any new responsibility that doesn’t align directly indirectly with work of the company or immediate family.
It started spiralling & gulping morale. But as a founder, I found the ony way to recover is work more. Work double on actions.
Lesson 6: To engage with top 4800 capital & power center – Be bold, creative & fearless
Those are 4800 Alphas that control entire India. Yet they are humans like you & me. Humans like people who are like them. These Alphas are bold & fearless. So be creative, bold & fearless. That’s what will engage them. Not the GTM or Sales playbooks.
Building Deeptech is a cocktail of emotions while knowing you have to take fast decisions, take blows & still come back, all while trying to protect your colleagues & family. Though, I fear, in their eyes – I might have failed many a times.
If you care about being among Top 4800 people, then let’s have a jam sometime. I have firm belief – to justify being a startup or real investor or innovator, the destination & road of what we do must pull us towards that 4800 club.